Transferring ISA

PaulStat

PaulStat

PaulStat

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So my ISA rate is due to drop next month (12 month fixed rate then down to base rate) anyway I think it's possible to do a transfer of the funds into a new one so I can get a better rate again.

Is this the case? If so what's best at the moment? I probably won't need to access the money until late 2012.

edit: doh wrong forum :p
 
Or is it the case that you can transfer to a new better rate, but if you've contributed to the old one in the same tax year you can't continue contributing to the one you've just transferred to?
 
You can only contribute £5100 cash in any given tax year across all the ISAs that you might have so if you transfer and have already contributed into the old one you can only add up to the threshold in the new one, thats if you didnt max it out in the old one.
 
ah ok so if I contributed £1000 into the old one this tax year I could only contribute a further £4100 into the new one
 
There are ISA products which you can transfer an existing ISA into, this is not the same process as transferring the cash, it isn't a case of withdrawing and adding it back in.

You can move as much as you want to a transfer isa product, as long asit was previously held within an ISA, and indeed it is often the best process that each 12 months you ship your entire isa saved amount to a new transfer isa, the one offering the best rates.

Not all isa products allow you to transfer in, but none can force you transferring out.
 
Yep, Hikari is correct, if you open an ISA that allows you to transfer in, you get forms from the ISA provider and the ISA is transfered in.

This is, as has been said, different to just withdrawing the cash and paying it in somewhere else as it dfoesn't affect your ISA allowances for the year as it is all money which has already been invested into ISA accounts.

Once you've sent the forms off the ISA providers have to do the transfer in within 28days.

Valve
 
Imho your best bet is to transfer your ISA money to something like an E-ISA, unlimited deposits and withdrawals with no notice or penalty. The interest rates out there at the moment are pretty dire, and there seems little point in securing money in a fixed rate for however many years.
 
A quick question I was trying to answer last night:

What happens if you exceed your limit? I have mine set up to deposit £150 or so each month, when I go over the £5100 cash limit, what will happen? Will I not be able to deposit any more? What about the interest earned on the balance? Where will that go?

Secondly, when the year is up, do I get a new £5100? Can I then store up to say £10,200 in it?

Bit confused about how these work sometimes :)
 
apeZ said:
A quick question I was trying to answer last night:

What happens if you exceed your limit? I have mine set up to deposit £150 or so each month, when I go over the £5100 cash limit, what will happen? Will I not be able to deposit any more? What about the interest earned on the balance? Where will that go?

Secondly, when the year is up, do I get a new £5100? Can I then store up to say £10,200 in it?

Bit confused about how these work sometimes :)
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Stupidly my paychecks have been going into my ISA recently so I can answer that about the limit. Once hit the money gets transferred into another account in your name (mine was the current account) with the name ISA SUBS EXCEED.
 
apeZ said:
A quick question I was trying to answer last night:

What happens if you exceed your limit? I have mine set up to deposit £150 or so each month, when I go over the £5100 cash limit, what will happen? Will I not be able to deposit any more? What about the interest earned on the balance? Where will that go?

Secondly, when the year is up, do I get a new £5100? Can I then store up to say £10,200 in it?

Bit confused about how these work sometimes :)
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Exactly, the yearly allowance is currently £5100 per year. So, yes every year you can invest that much. ISA's capitalise on the 31st of March so that is the deadline before the next ISA year. Next tax year its to be set at 5270 as well iirc.

If you exceed the limit the provider will just return the money to you, as they will be in breach of HMRC regulations.

Depending on the account you have, you can set up either a monthly warrant of interest, so the interest can be paid into another account, or even a yearly warrant if the term is in excess of a year long. By default the interest is just added to the ISA itself when it capitalises.

Hope this makes sense. :)
 
The allowance is only 5100 for a cash isa you can now transfer cash isas to a stocks and shares isa where the limit is 10200.

If you look about you can take a stocks and share isa out execution only (i.e. not going through a financial adviser). If you are comfortable selecting your own funds and are willing to risk a possible devaluation of your investment this is the way to go; you can achieve far more growth going down this route than going through cash isas.

ps this is not financial advice!
 
Whatever you do don't close your ISA, transfer it by completing a form with the new provider.

If you are looking for a new cash ISA then you could look at Halifax's Direct Reward 3 which pays 2.8% variable (rises with BOE base rates) for 1 year. It allows transfers in and even backdates the interest to the date you open it. Mine was all done within a week. They pay 3.0% if you have their Reward or Ultimate account.

If you can tie it up for 2 years then shop around for the best 2 year fixed deal, but bear in mind interest rates could rise at some point so you may lose out.

I think the limit for cash ISAs next year (from 6th April 2011) is £5335 or something...has yet to be confirmed
 
Thomas. PLease. said:
Exactly, the yearly allowance is currently £5100 per year. So, yes every year you can invest that much. ISA's capitalise on the 31st of March so that is the deadline before the next ISA year. Next tax year its to be set at 5270 as well iirc.
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Nope. ISA limits are for the tax year so from 6th April to the 5th April.
 
RDM said:
Nope. ISA limits are for the tax year so from 6th April to the 5th April.
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Yeh ok, the deadline is the tax year, but my statement that ISA's capitalise on the 31st of march stands true. Ideally you want to get it in well before this, to beat the peak and minimise the chances of your forms going missing. How I know this? I work in the ISA department for the largest building society in the Uk.
 
Thomas. PLease. said:
Yeh ok, the deadline is the tax year, but my statement that ISA's capitalise on the 31st of march stands true. Ideally you want to get it in well before this, to beat the peak and minimise the chances of your forms going missing. How I know this? I work in the ISA department for the largest building society in the Uk.
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The deadline is the end of business on the 5th April, for cash ISAs as long as the application is stamped as recieved by this point you can still invest for that tax year, much the same rules apply for S&S ISAs. You are not the only one who has worked in an ISA department :)
 
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